Time To Buy First Solar Stock?

Core Insights - First Solar has seen a 9% year-to-date increase, outperforming the S&P 500, attracting investor interest in renewable energy [1] - Despite Q1 earnings falling short of expectations, the company reported a gross margin increase to 41% from 37% in the previous quarter [1] - First Solar is focusing on domestic manufacturing expansion and advancing its proprietary CURE technology, leveraging cadmium telluride thin-film solar modules and a fully integrated supply chain [1] Financial Performance - First Solar's revenues have grown at an average rate of 14.3% over the past three years, compared to 6.2% for the S&P 500 [6] - Revenues increased by 26.7% from $3.3 billion to $4.2 billion in the last 12 months, while quarterly revenues rose 6% to $855 million from $794 million a year ago [6] - The company has a price-to-sales (P/S) ratio of 3.5, a price-to-free cash flow (P/FCF) ratio of 12.1, and a price-to-earnings (P/E) ratio of 16.4, all of which are favorable compared to the S&P 500 [8] Profitability Metrics - First Solar's operating income over the last four quarters was $1.4 billion, with an operating margin of 33.1% [9] - The operating cash flow (OCF) was $1.2 billion, indicating a high OCF margin of 29.0% [9] - The net income for the last four quarters was $1.3 billion, reflecting a net income margin of 30.7% [9] Financial Stability - First Solar's debt was $719 million, with a market capitalization of $17 billion, resulting in a debt-to-equity ratio of 4.9% [10] - Cash and cash equivalents amount to $1.8 billion of the total assets of $12 billion, leading to a cash-to-assets ratio of 14.8% [10] Market Resilience - FSLR stock has underperformed the S&P 500 during recent downturns, with significant declines during the inflation shock, COVID-19 pandemic, and the global financial crisis [11][12] - The stock has shown a tendency to recover, fully bouncing back to pre-crisis highs after significant drops [14] Overall Assessment - First Solar demonstrates extremely robust growth, very strong profitability, and extremely solid financial stability, but shows weak resilience during market downturns [15] - The current valuation of First Solar appears very low, making it an attractive investment opportunity [3][13]